I'm getting a headache over this! I did an appraisal of a tract home that had a permitted addition of a bed and bath. However, when I got there and proceeded with the inspection, I found that the owner had gone further with her improvements (after the permits were issued of course) by closing off the family room and adding a kitchen to it. Basically it's like a little apartment with the newly permitted bed/bath and the original family room & unpermitted kitchen. After checking online and double-checking with a real human at the city, I confirmed that this is illegal zoning since this area is zoned for single family. So now I'm perplexed. Do I do the appraisal as-is and figure out some cost to cure (which I hate because I am not a contractor) or do I do it "subject to" alterations with a hypothetical condition. Is one way better than the other? This is the one time when I'm happy for the HVCC. I can just imagine the phone call I'd get from the loan officer on this one back in the old days (can't you just overlook the second kitchen?) What would you do?